Can a new wave of two-in-one devices save the PC industry?

Summary:At the IFA tradeshow in Berlin, Microsoft's hardware partners are showing off the next generation of Windows-powered hardware, a category Intel calls "two-in-ones." By year's end, the market should be flooded with devices that can shift from PC to tablet on the fly. But who's buying?

Read this

Lenovo unveiled four new PCs, a smartphone, and a tablet this week at IFA. Those PCs are all convertible devices, powered by Windows 8.1, that can shift from a conventional configuration to a touch-friendly, keyboard-free layout with a quick flip. The Lenovo Vibe X smartphone, on the other hand, runs Android, as does the company’s new S5000 7-inch tablet.

Over at Toshiba’s stand, it was a similar story, with new portable PCs powered by Windows 8.1 whose displays detach from the keyboard to turn into tablets. A few feet away was an entire table filled with dedicated tablets, all powered by Android.

At a press conference yesterday, Intel showed off a dozen new PCs that included the Lenovo and Toshiba designs as well as similar convertible/detachable/flippable models from Sony and Dell and others. Most of them were powered by the new 4th generation Core (Haswell) chips and ran Windows 8.1. But when the company showed off two new small tablets powered by its upcoming Atom CPU (Bay Trail), one of them was running Android.

Sense a pattern here?

Microsoft’s hardware partners are acutely tuned to feedback from customers, most of whom have made it clear that they’re not yet convinced Windows 8 is suitable for use on a full-time tablet. It’s fine with PCs that can double as tablets in a pinch, but for now at least, Android has captured hearts, minds, and market share among touchscreen devices that don’t have a keyboard.

That’s a very big problem for Microsoft, which finds itself dominating the shrinking PC market and struggling in the fast-growing tablet segment. The recipe for long-term success has to include strong sales in the tablet category, which simply aren’t there for Windows-powered devices.

Indeed, both Microsoft and Intel have pinned their hopes for success on a risky strategy that emphasizes those hybrid designs. Intel calls them “two in one” devices, and uses the tagline "A tablet when you want it and a laptop when you need it.”

By the end of the year, Intel says, the number of devices in this “it’s a PC and a tablet” category will be 10 times what it was at the beginning of the year. And Intel’s market research (take it with a grain of salt) says that buyers who see these convertible devices are five times more likely to want to buy them than a conventional clamshell laptop.

Before you start calculating optimistic sales projections from those assumptions, though, consider the two hurdles that PC makers have to overcome before they book those sales. First, they have to get consumers (and small businesses) to actually try those two-in-one designs out and see their benefits firsthand. And second, they have to deliver those products at competitive prices. In theory, a device that is a PC and a tablet should sell at a premium price. In practice, there’s every reason to believe buyers who’ve grown accustomed to dirt-cheap PCs will be put off by those higher price tags.

That upcoming tidal wave of PC/tablets should be a vast improvement over last year’s models. Windows 8.1 addresses many of the complaints about Windows 8, the Haswell chips dramatically increase battery life, and high-profile apps are in the pipeline. In Steve Ballmer’s pre-retirement dreams, all those factors combine to restore Windows to its former glory.

The category where Windows tablets are most likely to succeed is in the emerging small-form-factor segment. Toshiba, whose current tablet lineup is dominated by Android models, introduced the 8-inch Encore yesterday at IFA. The device, powered by Windows 8.1, offers noticeably better screen quality than the Acer Iconia W3-810, which was first to market in the category, and the Bay Trail processor should translate to all-day battery life.

Still, in a world dominated by Android tablets at every price point and the still-strong iPad line, it’s an uphill battle for Windows tablets and two-in-ones to get mind share or market share. If this fall’s wave of new devices washes out, 2014 will be a long, dreary year for Microsoft, Intel, and their partners.

Ed Bott is an award-winning technology writer with more than two decades' experience writing for mainstream media outlets and online publications. He has served as editor of the U.S. edition of PC Computing and managing editor of PC World; both publications had monthly paid circulation in excess of 1 million during his tenure. He is the a...
Full Bio

Disclosure

Ed Bott is a freelance technical journalist and book author. All work that Ed does is on a contractual basis.Since 1994, Ed has written more than 25 books about Microsoft Windows and Office. Along with various co-authors, Ed is completely responsible for the content of the books he writes. As a key part of his contractual relationship with publishers, he gives them permission to print and distribute the content he writes and to pay him a royalty based on the actual sales of those books. Ed's books have been distributed under several imprints: Que Publishing (a division of Pearson Education); Microsoft Press (with production and distribution by O'Reilly), and Fair Trade Digital Exchange, where he was briefly a partner. On occasion, Ed accepts consulting assignments. In recent years, he has worked as an expert witness in cases where his experience and knowledge of Microsoft and Microsoft Windows have been useful. In each such case, his compensation is on an hourly basis, and he is hired as a witness, not an advocate. Ed sometimes receive fees and/or travel expenses for live speeches and webinars from companies and organizations. Acceptance of these fees does not constitute an endorsement of the company's products. Ed does not own stock or have any other financial interest in Microsoft or any other software company. He owns 500 shares of stock in EMC Corporation, which was purchased before the company's acquisition of VMware. In addition, he owns 350 shares of stock in Intel Corporation, purchased more than seven years ago. All stocks are held in retirement accounts for long-term growth. Ed does not accept gifts from companies he covers. All hardware products he writes about are purchased with his own funds or are review units covered under formal loan agreements and are returned after the review is complete.